Cruise Lines Retooling Field Sales Strategy

Theresa Norton Masek Trying to maximize their marketing dollars amid a dramatically changing distribution system, two niche cruise lines have quietly eliminated or reduced their field sales staffs. Seattle-based Cruise West has eliminated its five-person staff of district sales managers and Lindblad Ex

By: Theresa Norton Masek

Trying to maximize their marketing dollars amid a dramatically changing distribution system, two niche cruise lines have quietly eliminated or reduced their field sales staffs.

Seattle-based Cruise West has eliminated its five-person staff of district sales managers and Lindblad Expeditions cut its field sales staff by two-thirds. And while the major cruise lines say they are keeping their sales reps on the streets, they too are tweaking their sales structure to focus more attention on big producers.

Cruise West President Jeff Krida said the decision to eliminate the field sales reps last month does not indicate a lessening of support for travel agents, who sell 92 percent of the company’s product.

Cruise West had five sales reps; two were in the West, based in Los Angeles and Phoenix.

“The funding to support those positions was redirected to increase services to top-producing agents around the country in terms of marketing support,” Krida said.

About half of Cruise West’s departures are sold through its Small-Ship Partners 1,600 agents with training on the niche line’s soft-adventure product and through affiliated consortia including AAA, Virtuoso and LTG. The sales reps covered large territories, visiting Cruise West supporters as well as agents who had no interest in selling the niche product.

“We constantly found ourselves out there trying to convince agents that it is wise for them to become a niche or small-ship specialist and engage in proactive marketing to the right customers,” Krida said.

“But in many cases, we are coming up against agents who prefer to remain involved in selling mass-market product. It’s not a good way for us to keep spending money.”

Krida said consumer advertising will be increased in hopes of sending more new customers to the Small-Ship Partners.

Lindblad reduced its field-sales force from nine to three in late March, said George Johns, vice president of sales and guest services. Today, the sales force is composed of Johns and reps in Seattle and Charlotte, N.C.

“We are definitely not eliminating our outreach to the retail travel community but we are focusing it,” Johns said. “We need to focus our sales resources toward our producing agents and on those interested in being producing agents, and that is a very small universe of travel agents.”

Cruise West and Lindblad both say they are eager to work with new agents or those shifting their focus toward niche cruising. More sales information will be added on upgraded company Web sites and from increased inside sales and reservation staffs.

“We’re going to make it easier for agents to take the Small-Ship Partner course,” Krida said. “We’re happy to see that list grow, but we need to see some initiative on the agents’ part before we invest in them.”

Some industry consultants see the logic in reducing field sales staffs. “They’re not walking away from the distribution system; they’re just addressing the 20 percent of the agents that give them 80 percent of their business,” said Larry Dessler of Dessler and Associates, Seattle. “Rather than spread the money around to every place, they try to target the people who will make the best use of it. And it’s not a bad strategy.”

The major players such as Royal Caribbean Cruises Ltd. are keeping their field forces, but changing sales efforts to meet the demands of the shifting agency community.

Still, the basic sales structure is not that different from 25 or 30 years ago, said Rod McLeod, senior vice president of travel-industry relations for RCCL. “On the other side of that coin, there have been tremendous changes in the distribution system. We’ve counted 13 different pipelines that make up the total channel of distribution for cruises in North America, including cruise-only agencies, chain-based, affiliated, tour operators, host agencies, home-based.”

In addition, communication methods have also increased.

“There needs to be a better understanding of how to relate to this new retail distribution landscape,” McLeod said. “We’re still using our father’s Oldsmobile.”

For example, how does a Royal Caribbean International rep communicate product updates to an agency that has 20 independent counselors who might be scattered around the county or the continent?

“It’s not like going in, bringing some bagels and doughnuts and doing a morning seminar,” McLeod said. “It’s not as simple as it used to be, calling at ABC Travel at the corner of Main and Elm with two oak trees and a fire hydrant out front.”

RCCL has revised its sales structure to include key account managers, who represent perhaps 20 agencies averaging $2 million a year, McLeod said. That leaves the DSMs with something like 100 to 120 agencies in a territory. Agencies who sell less than $50,000 with an RCCL brand can get sales support from the inside-sales representatives, McLeod said, or from the agency Web site

Reaction from agents about the changes, and the cuts at Cruise West, were mixed. Kathy Hollister, a Small-Ship Partner who owns Hollister Travel in Longmont, Colo., planned to ask her rep to speak at a presentation for clients later this year.

“I don’t know who to turn to now,” she said.

Janice Ricker, a cruise specialist at All Horizons/A Cruise Loft in Los Altos, Calif., has been a Cruise West specialist for about five years.

“I feel a kind of a loss because my rep was always so helpful to me,” she said. But Ricker was also philosophical about the change: “They have always been very supportive of us and we have of them. As long as we still have the support, we’ll be OK.”

Virtuoso, the powerhouse consortium of luxury-travel sellers, said Cruise West remains a committed partner.

“Cruise West’s decision to reorganize its sales department must have been a difficult choice to make, and I don’t see this as a trend in the industry,” said Ann van Leeuwen, Virtuoso director of supplier relations.

Virtuoso said its Cruise West sales so far in 2003 have increased 18.4 percent over the same period last year.

Krida and Johns both vowed that the support will be there, but it will more often be offered over the phone lines or Internet instead of over a cup of coffee.

“Certainly that face-to-face contact is worthwhile, but it’s not the only way to provide excellent customer service,” Johns said. “We just produced an extraordinary DVD presentation of some of our trips that will be an amazing sales tool. Our primary agency partners can spend a half hour viewing this DVD and the training would be better than anything a sales rep could do. Just the doughnuts are not included.”